Posts by Sabine Schoenbach

This week, as the legislature begins to consider Unemployment Insurance (UI) reform, we’ll be writing about the proposed policies and the claims behind these policies under the heading “Parade of Horribles.”

1. Reducing the maximum benefit level

Yesterday’s $350 challenge in Raleigh called attention to the fact that the legislature’s UI reform proposal attempts to solve the business debt to the federal government by pushing most of it onto the backs of unemployed workers. $350 is the new proposed maximum weekly jobless benefit under consideration.

– $350 falls $524 dollars short of the Living Income Standard. It takes $874 per week for a family of three in North Carolina to afford the actual costs of essential expenses like housing, food, healthcare and transportation.

– The current calculation of maximum benefit amounts (66.7 percent of the average weekly wage) is in line with 35 states whose maximum benefit is indexed to between 47.6 percent and 75 percent of the state’s average weekly wage. The proposed cut caps the maximum benefit regardless of wage growth, cost of living, or inflation.

– The proposed cut slashes maximum benefits by one-third. No other state has ever reduced its maximum benefit so severely.

– The maximum reduction alone will take $105 million out of the North Carolina economy.

The General Assembly’s proposal to overhaul the state’s unemployment insurance (UI) system includes changes to the benefit structure that will drastically reduce benefits for workers at a time when unemployment remains high, jobs are scarce, and workers are struggling to find work.

And do you know what else is on the chopping block? Three small, but important UI provisions that are nationally recognized as best practices and have been adopted by the majority of states. The family hardship, disability and health, and trailing spouse provisions allow workers to maintain economic security when they lose or leave their jobs due to serious and unexpected life events. Under current law, for instance, a worker who loses her job solely because she is unable to accept work during a particular shift because of the inability to secure childcare, eldercare, or care for a disabled family member is eligible for UI benefits.

The new proposal eliminates this provision. Why? Would it substantially help the state repay the UI trust fund debt? Not likely. In 2010, only 0.1 percent of the benefit dollars paid out were paid to claimants under the family hardship provision. And a mere 0.008 percent of the total benefits were paid out to claimants under the trailing spouse provision, which allows a worker whose spouse is transferred to a geographic location too far for his spouse to commute and thus quits her job to be eligible for UI benefits.

Learn more about these proposed eligibility eliminations here, and find out how far behind North Carolina will be if we allow this proposal to move forward by checking out our state comparison fact sheet.

You may have seen the pictures in today’s news of the protests following Michigan’s passage of right-to-work legislation. Despite Governor Snyder’s assurance that the legislation is “all about taking care of the hard-working workers in Michigan,” the protestors surely thought otherwise.

Here in North Carolina, we’ve had right-to-work laws on the books for over half a century. We also have the dubious distinction of being the least unionized state in the nation. We haven’t seen many protests over the issue, but perhaps it’s time to reevaluate.

Research has shown that the arguments about right-to-work legislation being about workers’ rights and job creation don’t hold up. Whether unionized or not, the average worker in a right-to-work state earns approximately $1,500 less per year than a similar worker in a state without such laws. These lower wages in turn hurt the economy, restricting funds flowing into local economies and reducing consumer demand. Moreover, recent state-by-state analysis has found that right-to-work laws have had no impact whatsoever on economic growth in the states that have them.

The Institute for Women’s Policy Research released the 2012 Status of Women in North Carolina report yesterday. The report, which was sponsored by the NC Council for Women, lays out the progress that the state has made toward gender equality while highlighting persistent social, economic and political challenges women face.

A report released last week by the North Carolina Budget and Tax Center showed that North Carolina’s poverty rate remains high at 17.9 percent, and that many communities are still struggling to recover from the Great Recession. In 2011, 19.2 percent of women lived in poverty, an increase from 16.1 percent in 2007.